Monday, October 06, 2008

As one who knew (or cared) little about how investment markets work and how they are related to everything else (including the environment), I have found the latest happenings in our economy pretty interesting. With all the news reports that are out on the subject I've found its also an excellent time to learn...

Here's an episode of This American Life that explains the housing crisis, how it started, how it is linked to Wall Street, and its implications on the economy. As in any episode of This American Life, "The Giant Pool of Money" also provides interesting perspectives of people, in this case of ones who were directly involved in buildup of the housing crisis. Check it out.

2
comments:

That's so crazy. I'm an Econ major and I didn't know a lot of that stuff. (Probably my own fault, but shhh.)

I love This American Life. Did you listen to the sequel episode to this one? I think it was in that one that they talked about the stock injection method as opposed to the one that Paulson was a fan of - the one that is basically: "let's just buy up hundreds of billions of dollars worth of bad debt for the banks."

Obviously the banks are big fans of this plan. The stock injection plan was, however, buried pretty deep in the bill that was passed, and I guess in the past week it's actually being considered.

Yeah, I found the sequel to be equally informative, and left me feeling like maybe I had an inkling of why things have been so crazy with the economy.

I'm really glad they mentioned the stock injection plan, because I, like most other people I would imagine, had never heard of it before. Before that I was having doubts about the Bailout but had no idea how necessary it was. After I heard about the injection plan, it seemed pretty obvious which plan seemed more reasonable. The sequel mentioned how many economists, though conflicted about what the best course of action was, seemed to think that the stock injection plan was a pretty good bet. Makes you wonder why Paulson never even mentioned it as a possibility...

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